Did you ever wonder why folks in 2023 are afraid to ask for help? Let me make a bold suggestion. Could it be an issue of trust?

Since the readers of this newsletter are most focused on commercial real estate and how it affects their businesses, let’s try to get specific. Here we are, almost three years after the Pandemic and many business owners are still winging it when it comes to commercial office space.

To understand New Jersey office space, lets go back to the 1970’s which was the last time when New Jersey office space was in such shambles. At that time, more than half the office buildings in the State were at or near bankruptcy with a vacancy factor approaching 40 percent and going higher. The problems back then were mostly stemming from the no money down construction model, where Landlords had little of their own cash in the game. With no financial cushion, when the first business recession of the 70’s came on rather suddenly, Landlords had no way to hang on when interest rates were rising and the velocity of new leases were slowing down. It was a real mess. So, what saved us?

Back then, it was Wall Street money with the invention of the REIT, (Real Estate Investment Trust). Overnight a new entity, Cali Commercial, (soon to be Mack Cali) bought up 25 percent of the entire office market in New Jersey. With billions of dollars in new capital, all the old Class B properties suddenly got a facelift with new lobbies, and other spruce ups. Along came Gale and Wentworth who invented the Class A office market, and New Jersey was back from the dead, and stronger than ever.

Over the last 50 years, there have been a variety of recessions, and up and down markets, but now we have something new. New Jersey today has almost 400 million square feet of office space in more than 170 municipalities, making it one of the largest office markets in the world.

Unless you have been hiding under a rock for the last few years, as a reader of this newsletter you surely know how work from home and hybrid work schedules has led to a tremendous angst felt by the many thousands of business owners still trying to coax their employees to return to the office, many with rather mixed results across the board.

Which leads me back to my original question, why won’t business owners ask for help, or even admit they may have a real problem trying to figure out what they need for a working environment in 2023?

By now, they surely know that we are in uncharted territory. They seem to know instinctively that the office design they have today is probably not the office they need for the future, but most are very reluctant to admit they have no idea what they should be doing about it. Rather than planning for the future, most CEO’s are playing the game quarter to quarter, reacting rather than leading. Many offices are still ghost towns on Mondays and Fridays. The office in the days in between are in no way at capacity as there are still many vacant spaces throughout that don’t seem to be being utilized. Is this any way to run a business?

While there are still way too many business owners that are just trying to tough it out, we tenant advisors are actively working with those willing to reinvent new and inventive office solutions. Many of us have been teaming with space planners to come up with new space programs and office designs to once again create vibrant work environments for our clients.

To those who need help with questions about the future, why not give us a call, and find out why, at Dickstein Real Estate Services, “OUR DIFFERENCE IS YOUR ADVANTAGE®”.

Regards,
Lawrence Dickstein